PepsiCo to buy Rockstar Energy for $3.8 billion

PepsiCo has reached a deal to buy the Rockstar energy drink maker for $3.85 billion, the food and beverage giant said Wednesday.

The acquisition of Rockstar Energy Beverages — whose offerings include edgy-sounding flavors such as “Whipped Strawberry” and “Killer Grape” — aims to help Pepsi grow its presence in the energy drink market, the company said.

“Over time, we expect to capture our fair share of this fast-growing, highly profitable category and create meaningful new partnerships in the energy space,” PepsiCo chairman and CEO Ramon Laguarta said in a statement.

The deal, expected to close in the first half of this year, will expand Pepsi’s portfolio of energy drinks that already includes the Mountain Dew brand’s Kickstart, GameFuel and AMP offerings. The global energy drink market was valued at about $53 billion in 2018 and is expected to grow to roughly $86 billion by 2026, according to an Allied Market Research report.

PepsiCo has distributed Rockstar drinks in North America since 2009. But the current distribution agreement puts limits on how Pepsi can work with other brands and what it can do with its own Mountain Dew energy drink brands, according to The Wall Street Journal, which first reported the acquisition.

“We have had a strong partnership with PepsiCo for the last decade, and I’m happy to take that to the next level and join forces as one company,” Rockstar founder Russ Weiner said in a statement. “PepsiCo shares our competitive spirit and will invest in growing our brand even further.”

PepsiCo said it doesn’t expect the Rockstar deal to materially affect its revenue or earnings per share this year. PepsiCo shares were down 0.5 percent in premarket trading at $133.40 as of 7:16 a.m.

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